A natural monopoly
a. typically arises because of a patent or copyright
b. is a firm that, due to economies of scale, can serve a market at lower average cost than two or more firm could
c. is a Pareto improvement as compared to a perfectly competitive market
d. enjoys diseconomies of scale, so average total cost falls as more output is produced
e. enjoys economies of scale, so average total cost rises as more output is produced
B
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A consumer will maximize utility, given income and prices, when the marginal rate of substitution is equal to the ratio of the prices of the two goods
Indicate whether the statement is true or false
When the coupon rate on newly issued bonds increases relative to older, outstanding bonds, what happens?
A) The market price of the older bond falls in the secondary market. B) The market price of the older bond rises in the secondary market. C) Older bonds will sell for more than their face value. D) Older bonds can still be sold at their face value.
Structural unemployment refers to short periods of unemployment needed to match jobs and job seekers
a. True b. False Indicate whether the statement is true or false
Frieda wishes to buy a house worth $400,000 in the southern part of Florencia. If she decides to save half of her income from now on, which of the following is most likely to be true in this scenario? a. Her consumption function will be flatter
b. Her consumption function will be steeper. c. Her consumption function will shift upward. d. Her consumption function will shift downward.